Both the Banking Association of El Salvador (ABANSA), and the National Private Enterprise Association (ANEP), support the creation of a credit card law, that would provide greater transparency to the market, but disagree in regulating interest rates.
ABANSA chairman Armando Arias told newspaper La Prensa Gráfica: "We disagree with fixing interest rates, as we see it as price control. By principle we are against price controls, as we believe it is counter productive for the consumers and the financial system."
It will regulate the relationship between cardholders and issuers, by defining rules regarding contracts and interest rates.
With the new law, interest rates shall not be more than 10 points above the effective weighted average rate calculated by the Central Bank.
Guadalupe Hernández writes in Elsalvador.com: "For example, the average interest rate for a one year loan is 9.2%, so credit card rates could not be above 19.2% with the new law. However, in reality issuers charge interest rates that fluctuate from 29% to 38.9% for a $1.000 loan."
The Superintendent of Competition conducted a study on the credit and debit card market between April and August.
Journalist Daniel Choto wrote in Elsalvador.com: "The research will include an analysis of legislation, marketing strategies, management, costs, pricing policies and interests, as well as licenses to operate such services. What is sought, among other things, is whether there is a dominant position of one issuer."
Receive more news about Banking
Suscribe FOR FREE to CentralAmericaDATA EXPRESS.
The most important news of Central America, every day.
Maranco Belize offer fast reliable service, modern equipment, competitive rates, 70 year experience worldwide whether your needs are for farming, industrial, private house lots, community projects. We have drilled successful water wells producing fresh...